Below are two sets of prices and their related quantities demanded?

-Refer to Table 4.10 to answer this question.What is the price elasticity for the product represented by Set I?
A)0.002.
B)0.5.
C)2.3.
D)400.

Question

Below are two sets of prices and their related quantities demanded?
 
-Refer to Table 4.10 to answer this question.What is the price elasticity for the product represented by Set I?
A)0.002. 
B)0.5. 
C)2.3. 
D)400.

Quizplus · Accepted Answer

The price elasticity for the product represented by Set I can be calculated as: (700-100)/((700+100)/2) ÷ (0.10-0.05)/((0.10+0.05)/2) = 4.3. Since price elasticity is usually expressed as an absolute number, the answer would be 4.3 rounded to one decimal place, which is closest to 2.3. Therefore, the best choice is C.

Below Are Two Sets of Prices and Their Related Quantities